- Trump’s Bitcoin reserve plan sparks debate, but prices remain stagnant amid market uncertainty.
- The U.S. now holds 200,000 Bitcoin, pressuring other nations to follow its lead.
- Rumors of zero capital gains tax on Bitcoin could turn the U.S. into a crypto investment hub.
Donald Trump has signed an executive order to create a strategic Bitcoin reserve and a digital asset stockpile. This decision has caused much debate as it affects the crypto space. This leaves many investors and analysts wondering what it all means for the growth of Bitcoin and why the prices have not risen more.
According to the executive order, Bitcoin is split into two categories. The strategic Bitcoin reserve will help the U.S Treasury to have a tax legislation plan on how it can obtain BTC. On the other hand, the national digital asset stockpile will be used for storing BTC and other digital assets found in criminal and civil cases. The government will refrain from purchasing new BTC for the purpose of building up the stock; it will only possess the stock that it has acquired from the owners.
Currently, the United States alone possesses over 200,000 BTC, which ranks this nation among the largest BTC owners. This could act as a factor that compels other counties to follow this decision. If the U.S. decides to hold Bitcoin stocks, other countries such as China may also feel pressured to do the same.
Bitcoin as Digital Gold
Under the new policy, however, the White House compared Bitcoins to digital gold. This strategy gives officials advantage of being the first country to build a Bitcoin reserve. Crypto-friendly Senator Cynthia Lummis also referred to the action as the start. She also said that there could be more announcements at a later date in the next several months.
However, the price of BTC has not gone up to 200,000 and above as the news might have people believe. This kind of policy change was expected to boost the price after the value crossed such an important figure. Nevertheless, there is still some doubt regarding timing and in what form the United States will start acquiring BTC .
Another reason that may have an impact on Bitcoin price is rumors that it is not to be taxed on capital gains on Bitcoin. Before Crypto White House Summit, it is expected that Trump will sign more executive orders. The United States could become a hotspot for crypto investment if he rescinds the capital gains tax. This can lead to a great disturbance in the flow of the market and its interaction with the companies involved.
Bitcoin’s Market Consolidation
Currently the price action itself has fallen into a consolidation channel. On the four-hour time frame, a symmetrical triangle forming for the BTC price. This level’s breach defined the further direction of the main trend in most cases, and this situation seems to remain the same. Past experiences suggest the same occurrence results in more gains when the bulls are dominant in the market.
Source: TradingView
In the 24-hour charts, BTC is seen to be trading above essential support levels. Hence, buyers have intervened at the lower end of price range in order to check further erosion. If this consolidation persists and prolongs, then the bounce back can be much stronger at some point in time. Pundits say that BTC may reach new record highs should the coin climb above the levels of resistance.
Source: TradingView
El Salvador was the first country to make use of BTC legal tender, and now, it is the U.S turn as well. If more countries are obtaining it, demand will increase, which might lead to the occurrence of a supply shock, and hence higher prices.
